The True Meaning Of Wealth

How much are you worth? Read on to find out.

increase your net worth will ultimately determine whether you join the ranks of the truly rich. Paramount to achieving that objective is your adoption of principle No. 4 of the black enterprise Declaration of Financial Empowerment (DOFE): To measure your personal wealth by net worth, not income. The following steps may educate you about the best way to get there.

Learn about your assets and liabilities. You should know just where you stand. In her book Minding Your Money: Personal, Money Management and Investment Strategies (Book Partners Inc., $14.95), author Patricia Stallworth asserts that one critical step is to take “a financial inventory through a net worth analysis.” By studying every nook and cranny of your financial life, Stallworth believes that you can identify assets that will help you reach your objectives as well as spot barriers that will keep you from getting to your destination.

First, let’s be clear about what we mean by assets and liabilities. Your assets include everything you own, including cash, securities, real estate, property (i.e., automobiles, household furnishings, jewelry, etc.), life insurance, business interests and debts that are owed to you. On the other hand, liabilities are debts that you owe, including current bills, your mortgage, auto loans, student loans, lines of credit and credit cards.

Now, it’s time to get organized. Gather all the documents related to your assets and liabilities. One method of sorting through those mounds of financial documents is to develop an asset and liability organizer, as Stallworth sets forth in her book (see charts). For easy reference, Stallworth stresses that you place each item in a specific category. For example, include information on such assets as your stock portfolio by company, number of shares, purchase date and the location of the supporting documents for the security. The details on a liability such as a mortgage would include the type of loan (fixed- or adjustable-rate mortgage), your balance, monthly payment and the number of years you have left to pay.

Develop a net worth statement. After you organize your documents, list all your assets in one column and all your liabilities in another. Tally both columns and then subtract your debt obligations from what you own. If you have more liabilities than assets, this number will, of course, be a negative. To calculate your net worth, use the be Wealth Calculator found in the Guide in the be Wealth Building Kit (you can receive a copy of the complete kit by calling 877-WEALTHY or logging on to In addition to an assessment of your cash flow, the document can come in handy when you sit down with your financial planner or investment advisor.

Create a plan for long-term wealth. It’s critical that you develop solid wealth goals. And the most obvious objective is to develop a solid and diversified retirement fund. One report card of wealth is how much you’ve managed to accumulate in assets after working 30 years or more. In fact, the American Savings Education Council’s 1999 Minority Retirement Confidence Survey

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